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APRA releases enhanced governance requirements for superannuation trustees

Thursday 3 November 2016

 

16.42
 

The Australian Prudential Regulation Authority (APRA) today released updated governance requirements for APRA-regulated superannuation trustees (RSE licensees) with a final revised prudential standard and prudential practice guide on governance.

This release follows APRA’s letter of 18 December 2015, Governance arrangements for RSE licensees: Outcomes of consultation, which summarised the outcome of a consultation on proposed amendments to Prudential Standard SPS 510 Governance (SPS 510) and Prudential Practice Guide SPG 510 Governance (SPG 510).

The original SPS 510 and SPG 510 took effect in 2012 and 2013 respectively, and are being updated to further enhance governance practices across the superannuation industry.

The amendments to the prudential standard include requiring RSE licensees to have in place a governance framework which sets out policies and procedures to support effective governance practices, and requirements for these policies to address the nomination, appointment and removal of directors, board renewal, director tenure limits and board size.

The prudential practice guide has been updated to clarify APRA’s expectations regarding key governance practices, to support the new requirements set out in the prudential standard.

APRA Deputy Chairman Helen Rowell said ‘APRA places significant importance on sound governance of the superannuation industry, and these refinements to the prudential framework support the ongoing evolution of governance practices across the superannuation industry.’

Final SPS 510 will take effect on 1 July 2017, but APRA expects RSE licensees to consider the guidance in SPG 510 immediately.

Further details of the requirements, including the final prudential standard and prudential practice guide can be found on APRA's website.

Governance

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The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, credit unions, building societies, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding $6.5 trillion in assets for Australian depositors, policyholders and superannuation fund members.